Zimbabwe’s Economic Crisis: Does The Past Affect The Present?


When we look at the crises occurring around the world, we usually look at the immediate causes of that crises. Rarely do we pay attention to historical dynamics that have developed these crises in the first place. In the case of Zimbabwe, it has been suffering from what can be considered its worst economic downfall in a decade. After the dictator Mugabe lost his power almost a year ago, Zimbabwe’s economic and social situations have become progressively dire. However, its new President Mnangagwa promised to “fix” Zimbabwe’s miserable state.

 

It is important to note that prior to Mr. Mnangagwa’s election, Zimbabwe was already in a terrible economic crisis. Zimbabwe had to adopt the US Dollar as its national currency in 2009 due to hyperinflation. Moreover, since the early 2000s, Zimbabwe has been denied international credit due to its already accumulated debts to global lenders. It has yet to pay back $6 billion US Dollars. The unemployment rate in Zimbabwe is at 90%. As such, the government can barely collect taxes. What’s more, there are almost no businesses running in the country. There are also international sanctions in place against the country. Needless to say, Zimbabwe is experiencing a massive crisis.

 

As the first democratically elected leader in Zimbabwe, Mr. Mnangagwa, pledged to acknowledge and respect human rights, remove corruption from the public sector and introduce business-friendly economic policies. However, there have been certain doubts around Mr. Mnangagwa’s promises and whether or not he would actually commit to what he said. A combination of the government’s debt and foreign currency shortages have exacerbated the issue.

 

In the hope of boosting the economy and solving the problem of currency shortages, Mr. Mnangagwa introduced a 2% tax increase on internal electronic financial transactions starting October 2018. Despite this, businesses felt threatened by the new proposal and increased prices on goods and services to make up for the extra tax. In Harare – the capital of Zimbabwe – prices on basic necessities continue to rise with shop owners demanding payment only in US Dollars. While on the borders of the city a cholera epidemic has broken out. People are unable to buy food and medication due to the increased prices. Opposition Leader Nelson Chamisa says that the crisis in Zimbabwe is “not just a crisis of cash but a crisis of confidence, a crisis of trust.”

 

However, when examining the current situation, we should look past current events and examine Zimbabwe’s history as a precursor to the accumulated issues. Did colonialism have much of an impact on current-day Zimbabwe in shaping social, political and economic dynamics? Zimbabwe became independent from Britain on April 18, 1980, after almost 200 years of the British rule. After its independence was announced, Robert Mugabe became the country’s Prime Minister; and after changing the constitution, he became its President. During Zimbabwe’s first economic crisis, land ownership, and land utilization that were largely based on racial inequality were still in place as a legacy of the colonialist rule. Theoretically, Zimbabwe was a democracy but with the economy run under strict governmental control, the economic and social conditions were worsening. Not to mention that international sanctions introduced by the UK against Zimbabwe greatly affected trade and investment.

 

While many of the problems today are a result of poor management and corruption, it is possible to link today’s issues to historical developments. For example, President Mugabe decided to seize farms from “colonialist” owners to atone for what had occurred in Zimbabwe during the British rule. However, that decision massively backfired as agricultural foreign exchange collapsed which led to hyperinflation. As such, Mr. Mugabe tried to portray Zimbabwe as its own country, yet the Western countries didn’t appreciate that decision and introduced sanctions against Zimbabwe.

 

To solve the current economic crisis, the Zimbabwean government proposed to reduce the size of the public sector in an attempt to minimize excessive government spendings. However, such actions are met with doubt by Zimbabweans. As such, the government must find a way to legitimize itself and prove that it can execute its plans successfully. Moreover, instead of trying to find a way to fix problems on a large scale, it should focus on fixing smaller issues first.

 

According to Gladys Hlatywayo, a Harare-based political analyst and researcher, “The economic crisis will not be resolved until the political crisis is resolved.” Many of the trust issues between the citizens of Zimbabwe and the government were created by Mr. Mnangagwa’s predecessor and the supposedly rigged election. In the meantime, President Mnangagwa has already called for international aid in an attempt to stabilize the country’s economy. International aid, though, is not an easy solution. As it is not exactly foolproof and there is always a possibility of it leading to more corruption. For example, during colonialism in the Democratic Republic of Congo, Belgians used the land and resources however they saw fit. After the rule of the Belgians ended, the country’s government adopted the same “colonialist” mentality and used international aid and resources to enrich itself and not its citizens. This is just an evidence of how the past affects the present.

 

That is not to say that International Aid has never been effective. The collaboration between the government of Zimbabwe and the World Health Organization has led to a mass vaccination campaign treating the cholera outbreak. Dr. Portia Manangazira, the Zimbabwean government’s chief doctor for disease control, said that the mass vaccination will buy time to build much-needed infrastructure. Ideally, if this one thing were to be fixed, the government should be encouraged to use the momentum and focus on solving other issues. As such, aid can be inappropriately used by the government. However, it can also be an enormous help to citizens. In the case of Zimbabwe, if the aid program works, citizens will find more reasons to trust the government.

 

Although the past does indeed affect the present, there should be more transparency between  Zimbabweans and their government. The government should work on the temporary created because of the successful halt of the cholera outbreak and collaborate with opposition and citizens to ensure timely solutions.

Holly Heng

Holly is a student at UNSW Sydney, currently studying a Bachelor of International Studies/Bachelor of Media (PR & Advertising). She is a self-proclaimed Harry Potter nerd and avid Netflix watcher.

About Holly Heng

Holly is a student at UNSW Sydney, currently studying a Bachelor of International Studies/Bachelor of Media (PR & Advertising). She is a self-proclaimed Harry Potter nerd and avid Netflix watcher.